Risks
All investments have risks investors must be aware of. Some of the risks when investing in private securities include:
- Lesser reporting standards for private companies
- A prospectus is not prepared and a securities regulator does not review an Offering Memorandum prior to its distribution
- The business and management teams of the issuer are often new
- There is frequently no market to trade your securities
- There are generally lesser governance standards
Every investment made by an investor contains business and market risks inherent to it because not all investments display the same underlying risks. Every investor relying on the Offering Memorandum exemption will receive an Offering Memorandum that outlines the risks of that specific investment. At CPI we work hard to choose offerings with strong returns for the calculated risk associated to each offering selected. Our dealing reps are from a variety of backgrounds and sectors working together to ensure our due diligence is complete on every offering we present. If you have questions about the risks of investing in alternative investments or would like to know how your portfolio would benefit from investing please contact an advisor.
Regulations
In 2009, the Canadian Securities Administrator enacted National Instrument 31-103, creating an investment dealer category called an Exempt Market Dealer (EMD), which would be allowed to sell prospectus-exempt (private) securities. Each province in Canada has a regulator which governs their own Exempt Market. EMDs must comply with NI 31-103, which sets out its responsibility to know-its-client, know-its-product and complete trades (sales) that are suitable for its clients. Charterhouse Prime is based in British Columbia and further registered as an EMD in BC, Ontario and Alberta. Dealing Representatives who sell exempt offerings are required to be registered with an EMD.